FREE ESSAY ON SOFT DRINK INDUSTRY

SOFT DRINK INDUSTRY

Executive Summary
The word 'Saturation' does not exist in the dictionary of the U.A.E. Year by year, new
products and their competing items have entered into the field and have successfully
created a slot for themselves. This phenomenon is greatly supported by the open down
policy of the local government to the people coming from other lands for settlement and
tourism. 
Ice creams are a product that has not seen their prime in the U.A.E. It's potential is
tapped in a meager form. Not that the commodity is in short supply. There is ample
ice-cream available even at the moment. But, there is great scope of habitualizing the
inhabitants of this place to consume more of the product, by exploiting the U.A.E.
climate to its best potential. This statement vindicates the statistics that while an
average person in Australia consumes 36.87 pints of ice cream, and in the United States
30.04 pints, the consumption in U.A.E. is only 6 pints per capita. Thus, even if the
consumption is increased by 6 times for a person here, we will still be comparable to
Australia and will need more effort to become world leader in consumption. This indicates
the amount of vacuum existing in the U.A.E for the growth in the Ice-cream consumption. 
The bottom line is a 'Difference'. Up until now the ice creams that are being sold in the
U.A.E. are mostly the conventional stuff and it will bring a sea change in the minds of
consumers about ice creams if they are given something different at affordable prices and
at accessible locations. One such company that can meet all these interests is Ben &
Jerry's.
We are a group of investors now planning to open Ben & Jerry's ice cream parlor. The food
and beverage industry has been in a boom. Therefore we plan to make our mark in the
industry as the premium ice cream and yoghurt parlor in the country. U.A.E has a
multi-cultural environment thus providing a good market for Ben&Jerry's.. Ben&Jerry's is
the 'difference' which can fit in the slot to help bring
up the per capita consumption of the country. Most of their ice creams are made from
fresh fruits, which hardly any other maker has attempted. 
Introduction & Background
The company Ben & Jerry's had its humble beginning more than 70 years ago, when its
founders started manufacturing ice cream with a hand - cranked machine. Today, it offers
the widest range of ice creams and frozen deserts in packs, including cups, bulks, and
cones. The brand enjoys its reputation for successful innovation and development of
flavors and its new offerings are eagerly awaited every summer. 
Current Market Situation
The Marketing Environment- The United Arab Emirates has an ice cream market of Dh140
million, yet it has one of the lowest consumption (6.00 per capita/ pints) of ice-cream
when compared to Australia which consumes 36.87 per capita / pints and USA 30.04 pints. 
The ice-cream parlors Baskin Robbins enjoys having a monopoly followed by Haagen-Dazsas
and Breslers. There are other non-famous parlors in some shopping centers and malls.
Considering that there is two major franchises in the U.A.E market there is a high scope
in entering the ice-cream industry. As for the external environment, it is divided in the
following manner. 
Competitive Environment- There is high degree of competition in the foodstuff industry.
In the ice-cream industry, the market share is evenly distributed with Nestle being the
market leader, followed by Walls and then by Kwality. Recenlty Hag n' Das has also come
up with major marketing schemes and are aggressively marketing their ice creams. They
have a parlor opened at Al Diyafah Street in Deira. There is no official study to the
exact market share. The prices in the parlors are about 10% higher to that of franchises
in London and Canada. The other competitors in the family line are Igloo, Unikai, Kimo
Cadbury, Mamma- Mia, and also those previously mentioned. Hags n' Das, Cadbury's, Baskin
Robbins and have an importation, the rest are local manufacturers. Below mentioned is the
approximate market share. 
Estimates provided by Kwality and Unikai year 1996
Overall market growth 20% on yearly basis
Social and Cultural environment- We intend to target our products to the affluent society
of Asian sub continent where they prefer fresh fruits, the attempt which is being made to
introduce ice-cream made of fresh fruits are likely to catch up in no time even if they
are slightly higher priced as compared to conventional ice-cream. Since conventional ice
creams like that of Vanilla, Chocolate, Strawberry will also be produced, we have not
neglected that segment too.
From the research conducted it was evident that most of the ice cream consumers want a
change from the normal ice creams available and have also shown much excitement towards
the opening of Ben & Jerry's in Dubai. 
Taking into consideration the hot and the humid climatic conditions, people show
acceptance towards cold foodstuff - whether cold drinks or the ice creams. Ice creams are
not consumed on daily basis, but families do buy and consume it in bulk(family packs of
Bulk ice-cream 1litre, to 5litre containers).
The average income per family is about Dh. 5,000/- in which the consumers can afford to
consume the ice creams in parlors.
Legal and Political-Rules and Regulations- 
1. Trade license for importing foodstuff.
2. Import & export license.
3. Health certificate of the food we are importing.
4. Original Invoice. 
A very important step should be done before anything. Which is to get a sample in advance
from the food we intend to import and send it to the lab at the health department which
is located at the port, the results of the experiments are given within an hour. The
other way to do it is by importing the goods and at the port we check them in the lab.
The food will be shipped in a cold container. After certifying the documents the goods
are released from the port then and before storing the municipality should approve it,
after that there will be an inspection every now and then from the ministry of health.
They inspect the packaging, the delivery method, and the expiry date.
Our approach to Chamber of Commerce was not very productive as we understood that not
only do most of the countries around the world not have any Franchising law but Chambers
of Commerce also does not involve themselves in this exercise. The simplest system to
know about the various Franchises available could be to approach the trade or diplomatic
missions of various countries who have substantial data on established branches in
various categories.
Economic Conditions-Compared to other GCC, countries, it has political stability, very
low inflation, the stability of the currency against the world's major currencies and
affective bank industries. The Dirham is pegged to the dollar and it is exchanged at
3.665 for a dollar. The government is giving new opportunities to make the economy less
dependent on the oil revenues. The per capita living is at $23,500 same to that of
NewYork, which shows that there is a high consumption on the disposable income.
Technological environment-
1) Cold storage containers: the importation of ice creams requires the use of Cold
storage containers, which can be easily leased from the companies.
2) The cold storage warehouse: which will be located at the Jebel Ali Free Zone 
3) Chillers: will be used at the super markets to store Ben & Jerry's ice cream
products.
4) Marketing Information System: Most of the ice cream parlors in Dubai use a
computerized system to record the sales, however they do not have any system which record
customer data, customer liking, and their addresses. We will use such a system that will
enable us to provide them home delivery without the hassle of asking their addresses
again and again. This will provide customer satisfaction and their reactions which will
enable us to respond to their needs better and form a base for the primary data for
future research.
.
Opportunities
a Ben & Jerry's is well established Brand in Europe and thus has an existing potential
clientele with the European expat population.
a Ben & Jerry's has a huge market in terms of U.A.E. as it has a very high per capita
consumption of ice creams.
a Ben & Jerry's has also the option to export to the other G.C.C. countries and other
Middle East countries.
Threats
a Ben & Jerry's has to set up a project of international standards will have to invest in
moneys which to date have not done so, and might find it difficult to sustain the
profitability for the 1st few years.
a The other players already have a head start over Ben & Jerry's over the past 2 decades,
and are very well established in the market.
a To generate consumer awareness, product trials and store traffic, Vadilal will have to
spend big amount of moneys in terms of advertising and promotions, which will be in
excess of what the other multinational brands are spending.
a The embargo on certain flavors due to specific ingredients that are prohibited in the
U.A.E. Ingredients such as gelatine or those specially derived from pig fat.
Segmentation
Market segmentation process:
1. Identify dimensions: The dimension is already identified. We want to go in for ice
cream business.
2. Develop relevant market segment profile: Ice cream is an item, which appeals to all
the sectors of society. We can cater to the following segments:
a Families 
a Kids (1-12 yrs)
a Teenagers (13-20)
a Young adults (20-35)
a Adults (35 & above)
3. Forecast total market potential for each segment: 
a) Analyze competitive forces within each segment: Strong competition exists for
families, kids, teenagers, and young adult categories from Baskin Robins, TCBY, and
Bresler's and Haagen-Dazs. These are our main competitors. 
b) Determine marketing mix to serve each segment: We have the capabilities and resources
to cater to all of the above segments and the marketing mix is discussed later in the
case. 
4. Forecast own market share for each segments. 
5. Estimate cost/Benefits for each segment: 
6. Do benefits achieve company and justify development of each segment: Yes, benefits
each of these segments will result in customer satisfaction and achieve our
organizational objectives.
7. Decision on selection of target market segment: We think that the best segment is that
of Families, teenagers, and young adults.
Based on our research we are going to segment our market based on demographics
segmentation. Under this we shall attract families who have a middle social class or
above. In addition to this our target group will include young people (17 & above). We
shall attract families and young people by appealing to their motives and lifestyles. We
will be using unconcentrated strategy to attract customers.
The marketing research process is a five-step application of the scientific method that
includes:
1. Defining the problem: We needed an initial market research to determine the following
aspects:
a Awareness of Ben & Jerry's.
a Acceptance level of fresh fruit ice creams
a Share of competitive brands.
a Target customer's tastes and preferences
2. Formulating hypothesis: Based on all the insight and knowledge available about the
problem from previous research studies and other sources our null hypothesis is 
' Ben & Jerry's is a known, and accepted brand.' Alternative hypothesis was ' Ben &
Jerry's is not a known and not at all an accepted brand.'
3. Research Design: Our research design was a mix of descriptive and diagnostic approach.
We chose descriptive research to find out and understand the characteristics of Dubai's
ice cream market and target audience's buying behavior. Diagnostic research design gave
us information on reasons for customer's choices.
4. Data Collection: Data was collected from 2 sources: Secondary and Primary. 
a Secondary sources: We collected data from published information in newspapers and
magazines
a Primary sources: Our primary sources included, questionnaires, telephone interviews,
and personal interviews.
5. Interpretations: Based on the analysis we have reached the conclusion that Ben &
Jerry's is a considerably accepted brand. It's products will be definitely be welcomed.
Around 65% of the people are aware of Ben & Jerry's. Our main competitor is Baskin Robins
for their parlors and Walls, Nestle` etc for retailer ice creams
Product Mix
Product means the need-satisfying offering of a firm. Ben & Jerry's is going to provide a
fast moving consumer good (FMCG) which is going to satisfy the target audience. Ben &
Jerry's ice creams are going to create form utility for the target base. Ben & Jerry's
ice creams will be a shopping heterogeneous product in U.A.E. A shopping heterogeneous
product is that which a consumer sees as different - and wants to inspect for quality and
suitability. Quality and style matter more than price. These ice creams will be of
highest quality and it will be perceived as being of highest quality due to its customer
satisfying characteristics. The parlors will provide excellent customer services for
parlor visitors. 
Product Development Strategies
We shall be using Market Development Strategy i.e. introducing an already existing Ben &
Jerry's ice cream in a new market i.e. U.A.E.
This product line will benefit us in the following ways:
a Risk will be reduced as our portfolio is extended.
a We can fall back on the successful products
a We will be known to cater a wide assortment of ice creams and thus our image will be
improved.
a We will re-invest all our profits within the same product line and extend our product
line.
Based on the research ,we have found out that 43% people are aware of Ben & Jerry's. To
create more awareness and sales, we shall follow the product adoption process. First,
promotions will be carried out to create widespread awareness of Ben & Jerry's and its
availability in U.A.E. Samples will be arranged to help target consumers make the initial
purchase decision. At the same time, we will emphasize quality control and provide solid
guarantee to reinforce buyer opinion during the evaluation stage. Finally, production and
physical distribution will be linked to pattern of adoption and repeat purchases.
Product Life Cycle 
Ben & Jerry's is in its introductory stage in the U.A.E. The sales will be low in this
stage. People aren't looking for Ben & Jerry's ice creams. We expect this stage to last
for 6 months during which intensive promotions will be carried out and Ben & Jerry's ice
creams will be the talk of the town. During this stage we shall be focusing only on the
sub continent crowd and later on extending our target base to other nationalities as
well. 
Factors that play a major role in determining the length of each stage are relative
advantage, compatibility, complexity, divisibility, and communicability. Our introductory
stage will be very short lasting around 6 months due to :
1. Relative advantage of providing fresh fruit ice creams and home delivery services.
2. It is the simplest and most exquisite ice cream.
3. . Our message to the public is simple, Not just any ice cream!
Packaging has always been an important aspect of the product offer but today it is
carrying more of promotional burden than in the past. 
Ben & Jerry's, understanding the importance of packaging and how it would affect the
promotion of the product has produced the packages keeping in mind the following
aspects:
1. It should contain, protect and dispense the ice cream.
2. It should provide point of purchase advertising, and perform the role of a continuous
communicator.
3. It should serve as an attention-giving device.
4. It should provide reminder to the current users(this will be applicable when the
product reaches the growth stage)
5. It should be source of information, about the ingredients and potential cautions.
6. It should provide a vehicle for announcing promotion and sales.
7. It should promise physical and emotional end benefits.
Ben & Jerry's package should help sell Ben & Jerry's 's Fresh fruit ice cream', 'A
vegetarian ice cream' and ' A not so ordinary ice cream' image.
Four areas which have to be considered for designing Ben & Jerry's package:
1. Verbal: The words used to describe the product or the caption line has to be
attractive enough to catch the buyers or even the passers by attention.
2. Visual: The package should use sober yet attractive colors to be able to hold the
shopper's concentration and fascinate the buyer to buy the product.
3. Function: The function of the package should (firstly), protect the ice cream inside,
stop it from spoilage or being melted. Secondly, it has to be convenient to be used the
buyer i.e. the package should be user friendly (cups and the cones should be
appropriately packed.) Thirdly, it should facilitate distribution in the supermarkets.
4. Container composition: The containers used to hold ice creams should be made of
plastic, as it is the best container that can be used. Use of cardboard boxes doesn't
give it a very good image and above all if the ice cream melts than the package will
become soggy and will leak. The new Ben & Jerry's pint is being manufactured with
unbleached paper.
Price Mix
Let us examine the pricing objective that Ben & Jerry's will pursue:
Sales oriented objectives: We seek some level of unit sales and gain 40% of ice cream
market in U.A.E. We seek to achieve this objective in order to have better economies of
scale than competitors. This is a sensible objective because the ice cream market is
rapidly growing. We hope that larger future volume will justify sacrificing some profit
in the short run. We shall keep our price flexible.
Price-Level policies - over the product life cycle
We shall pursue a penetration pricing policy throughout the introductory and growth
stage. It is attractive to us because selling larger quantities will result in lower
costs because of economies of scale. Penetration pricing will also help us deal with
competition during growth stage. Our prices will be as follows:
Type Product Price
(in AED)
Single Scoop 
Flavored Ice cream 3.00
Fresh Fruit ice cream 4.00
Double Scoop 5.00
Fresh Fruit ice cream 7.00
Sundaes 8.50
Small Cup - 50 ml 1.00
Big Cup - 100 ml 2.50
500 ml pack Flavored Ice cream
Fresh Fruit ice cream 5.00
7.00
1 liter pack Flavored Ice cream
Fresh Fruit ice cream 7.00
10.00
2 litter pack Flavored Ice cream
Fresh Fruit ice cream 12.00
15.00
Large glass Milk Shake 7.50
Regular glass Milk Shake 4.50
Additional toppings 0.50 (each)
Large glass Iced yoghurt 5.50
Regular glass Iced yoghurt 3.50
Discount Policies
We shall offer the following types of discounts to our retailers and customers:
Quantity discounts: These discounts will be offered to encourage customers to buy in
larger amounts. This will let us get more business from both retailers and target
audience. We shall offer noncumulative quantity discounts. These discounts will be given
for individual bulk order.
In addition to this we shall also offer cash discounts to retailers. The term for this
will be 4/10, net 3. 
Allowances: Advertising allowances will be given to retailers to encourage them to
advertise or otherwise promote Ben & Jerry's ice creams. Promotional allowances will also
be offered to customers during promotions.
Place Mix
Where to locate usually depend on consumers. An ice-cream parlor located any where in
Dubai would do well due to its humidity but it is more important to consider the
consumers purchasing patterns and locality of incessant shopping. The main objective is
to make the ice cream available to the consumers in sufficient quantities, at the right
place and time. 
Creating awareness of an unfamiliar product requires a location were there are large
crowds of people. This way Ben & Jerry's ice creams is constantly exposed to its
potential customers. Another important aspect to consider is our target market. Where
exactly do our potential customers dwell? This would depend on a demographic research
based on age. According to research, our potential customers are children and teenagers.
However, young adults are also keen on purchasing ice creams. Place decisions need to be
considered carefully. A wrong decision can cost millions and lead to a loss. The other 4
Ps of marketing can always be adjusted but once place decisions are made, it is difficult
to modify.
Strategic Decision Making in Place
Place objectives
As Dubai consists of many families and since children and most teenagers depend on their
parent's for financial support, it is important to find a location where families,
children and young teenagers dwell. According to our observation, many of the shopping
areas in Dubai, such as Al Diyafah Street, Meena Bazaar, Al Nasr Square and Al Riqqa
Street are crowded with people usually families and teenagers. According to the research
60% of people are suggesting to have our franchise outlet openend on Al Riqqa Street.
Al Riqqa Street is a cosmopolitan area consisting of:
1. Shops
2. Restaurants
3. A cinema
4. Shopping complex
5. Residential areas
6. Offices- Airlines
Riqqa Street has attracted a lot of tourists. Situated in the heart of the city, it
provides Ben & Jerry's with the opportunity to exploit its market. The Dubai shopping
festivals is also held at this area. 
Types of channels
Wholesalers and Retailers 
Ben & Jerry's plans to adopt an indirect method of marketing. Direct marketing is not
practical because a lot of consumers are not aware of Ben & Jerry's ice creams. Thus,
they would be reluctant to buy it. The franchise itself acts as the wholesaler and
producer, while the supermarkets are its retailers. An intensive distribution is
appropriate, as many consumers prefer to purchase their groceries from supermarkets
outlets located in the neighborhood. Since the sales of Ben & Jerry's directly depends on
its availability, it is essential to have Ben & Jerry's ice creams distributed into
supermarkets that are located in residual areas, such as Karama which is on Zabeel road;
Al Shaab colony at Deira, Ghusais and Satwa. 
Channel relationships must be managed
Building a good relationship is Ben & Jerry's main aim, as the supermarket outlets are a
main source of revenue apart from the parlor proceeds. The supermarkets are also an
advantage to Ben & Jerry's because it creates rapid awareness and deals with mass
selling, resulting in more sales. The franchise needs to develop an understanding with
all its channel distributors through a cooperative relationship, which can only be
attained if channels coordinate and work together with one common objectives, i.e. to
satisfy their consumers 
Middlemen/ facilitators needed 
Reaching consumers throughout many geographical areas
Maintaining good relationships with the retailers are important. Majority of the
consumers are likely to purchase ice creams from a supermarket than from a parlor.
Supermarket attendants are the actual promoters of the ice cream. They provide the
consumer with details and information of the ice cream and are more likely to serve their
customers better. Since Ben & Jerry's consumers are spread across a large geographical
area, supermarkets are the only way to reach their final consumers at a wide span. 
Physical Distribution
Ben & Jerry's needs to consider how their ice creams and products are to be physically
distributed. Ice reams are not fragile products, thus reducing the concern for unexpected
damage. However, they have to consider the costs of transportation of their ice cream and
other diary products because consumers are more likely to appreciate a product that is
inexpensive but at the same time high in quality. Road is the only mode of transportation
in Dubai. Therefore, Ben & Jerry's will consider hiring trucks or vans of their own to
distribute their products.
Ben & Jerry's aims to collaborate with its retailers, as we believe that it is important
to cooperate and work efficiently in order to attain profitability and gain consumer's
interest. Considering the view of our consumers is our first priority.
Promotion
We will have to adopt two main forms of Non-Personal form of selling, which will
involve:
Mass Selling: 
With our target market, which is so large in Dubai, Mass selling seems to be the most
appropriate and feasible one. Under Mass Selling we will adopt two methods.
? Advertising
? Sales Promotion
Let's analyze the strategic palling for each of these.
Advertising:
The achievement of our mass selling will be accomplished through Advertising. A paid form
of non-personal presentation of ideas, goods and services. Ben & Jerry's will use various
forms of media to inform and persuade its target audience, which will be discussed
further in our media selection section.
Advertising objectives:
Our objectives need to be specific; they have to communicate the right message-
Short-Term objectives-
? Help position Ben & Jerry's ice creams, in Dubai, by informing and persuading our
target market.
? Help obtain desirable outlets and tell consumers where they can purchase Ben & Jerry's
here.
? Create product differentiation
? Get immediate results.
Long-term objectives-
? Create brand loyalty
? Update our Promotional mix, through constant feedback from our consumers
? Expand market share by capturing all the super/hyper markets and opening up our
branches of ice-cream parlors throughout Dubai.
Media selection
Will depend upon the most practical, appropriate and cost effective ones that will work
the best in this part of the world.
1. Press & magazines-very popular and effective.
2. Radio - Most of the people here while driving listen to the radio the most, as its
FM's are very popular. Hum FM is an Indian/ Pakistani Radio channel and many people tune
into it during the day. We think radio here will work most effectively.
3. TV commercials- not very popular, but essential to create more visual appeal for our
ice creams.
4. Billboards and banners- very expensive but are hi-tech and appealing, once we
establish ourselves we can take advantage of this medium here.
Media schedule 
Budget:
Initially Ben & Jerry's will have to invest from its initial capital requirements. The
initial capital requirements are Dh.1,000,000/- out of which Dh. 144,000/- have been
allotted for promotion. But as Ben & Jerry's starts generating revenue then a combination
of the following methods will be used:
a % of sales method: Following this method Ben & Jerry's will set aside 15% of its
revenue from sales for promotion. Although when the entire amount will not be used the n
it will directly go into the promotion contingency budget. This will be used when the
sales of Ben & Jerry's will fall i.e. during the winter season in Dubai (end of
November-mid of February 3.5 months or less approximately). The amount from the
contingency budget will be used to level sales during theses months.
a Task-objectives method: Using this method, the promotion budget will be divided among
various tasks- sales promotion-40%, advertising-50% and public relations-10%.This
allocation will be maintained till Ben & Jerry's moves from the introductory stage to the
growth stage and when all its innovators turn into early adopters.
According to our budget we have allocated 50% for Advertising. Out of which:
a Radio- Cost of advertising a radio ad using HUM FM: Dh.250 per second =250*30seconds
=Dh.7500/-
a TV-
a Press & magazines-
a Billboards & banners-AED 7500/-
Who will do the work?
Advertising Agency- Are specialists in planning and handling mass selling details? They
will help us plan and decide the right channel of communicating with our consumers and
help us do our job more economically.
Our second method of mass Selling will be:
Sales Promotion
Other than advertising, we need to stimulate interest, trial and purchase of our
product.
Ben & Jerry's will use this method intensively in Dubai because:
? It is very popular in Dubai
? This method also produces immediate results, because the product is immediately
reachable for e.g. promotions in supermarkets and most importantly if the consumer likes
the product, the purchase decision can be made on the spot.
Sales Promotional objectives
? Make people aware of the promotion through ads and word of mouth
? Help them understand the promotion, the place price & the offer, what it means
? Produce immediate buying results
? Feedback- makes our consumers come back for more.
Methods- aimed at our target consumers
1. Contests
2. Coupons- very effective in Dubai
3. Chiller plays
4. Point of purchase
5. Banners and streams next to POS.
Methods - aimed at our retailers (supermarkets)
Trade promotions- The objective here is to encourage them to buy and stock our items in
large quantities.
1. Price deals
2. Promotional allowances
3. Merchandise aids
4. Calendars
5. Gifts
Over all promotional objectives:
? to provide information in the right manner
? affect behavior- persuade them to stop and think about Ben & Jerry's 
? stimulate demand
? Create Product Differentiation- this is to differentiate our ice creams, from that of
our competitors. (E.g. Fresh fruits for the healthy feeling).
? Increasing our product value by this differentiation and quality service.
? finally increasing sales and revenues
Communication Process
Attention Interest Desire Action
This process is very essential, thought w